Filed 12/7/20; See dissenting opinion; THE SUPREME COURT OF CALIFORNIA

HAS GRANTED REVIEW

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION FIVE

JEFFREY PRANG, Los Angeles

County Assessor,

Plaintiff and Respondent

v.

LUIS A. AMEN et al., as Trustees,

etc.,

Real Party in Interest and

Appellant,

B298794

(Los Angeles County

Super. Ct. No. BS173698)

APPEAL from a judgment of the Superior Court of Los

Angeles County, James C. Chalfant, Judge. Affirmed.

Greenberg Traurig, Colin W. Fraser and Cris O’Neal for

Real Party in Interest and Appellant.

Lamb and Kawakami, Thomas G. Kelsh and Michael K.

Slattery; Mary C. Wickham, County Counsel, Nicole Davis

Tinkham, Assistant County Counsel, and Richard Girgado,

Deputy County Counsel for Petitioner and Respondent.

Ajalat, Polley, Ayoob & Matarese, Richard J. Ayoob,

Christopher J. Matarese and Gregory R. Broege for Amicus

2

Curiae Ajalat, Polley, Ayoob & Matarese.

California State Association of Counties and Jennifer B.

Henning for Amicus Curiae California State Association of

Counties and the California Assessors Association.

McDermott Will & Emery and Charles J. Moll, III, for

Amicus Curiae Charles J. Moll III.

Xavier Becerra, Attorney General, Tamar Pachter,

Assistant Attorney General, Karen W. Yiu and Heather B.

Hoesterey, Deputy Attorneys General, for Amicus Curiae

California State Board of Equalization.

__________________________

The Revenue and Taxation Code provides that a transfer of

real property between legal entities triggers a reassessment of

the property’s value for tax purposes. Importantly for this

appeal, the code also contains an exception to this rule when the

proportional ownership interests in real property of the

transferor and transferee—”whether represented by stock” or

another measure—remain the same after the transfer. This

appeal raises the question of how we should interpret “stock” in

the phrase “proportional ownership interests of the transferors

and transferees, whether represented by stock, partnership

interest, or otherwise, in each and every piece of real property

transferred.” (Rev. & Tax. Code, § 62, subd. (a)(2).) Specifically,

does “stock” refer only to voting stock or all classes of stock?

Appellants, the trustees of the Amen Family 1990

Revocable Trust (Trust or Appellant), challenges respondent Los

3

Angeles County Assessor’s (Assessor) reassessment of property

the Trust received from a corporation that the Trust had partially

owned.1 Although there were at least five owners of the stock of

the transferor corporation (including the Trust) and the

transferee was solely the Trust, the Trust contends the

proportional ownership interest exception applied because it had

owned all the voting stock in the corporation. In the Trust’s view,

ownership interests in real property held by a corporation should

be measured by voting stock alone, meaning that the Trust was

the sole owner of the real property held by the corporation, and

remained the sole owner after the corporation transferred that

property to the Trust. The Assessor measured ownership in the

real property held by the transferor corporation by all stock—

voting and non-voting.

According to the Trust, the term “stock” as used in Revenue

& Taxation Code section 62, subdivision (a)(2) (section 62(a)(2))

should be interpreted to mean only voting stock.2 The Assessor

argues “stock” in section 62(a)(2) means exactly what it says—

stock—and applies to all classes of stock, including for present

purposes both voting and non-voting stock. Under this

interpretation, the Assessor was right to reassess the property

1 The State Board of Equalization (SBE) and others filed

amicus curiae briefs at our invitation. Under California Rules of

Court, rule 8.20(c)(6) we provided the parties with an opportunity

to respond to the amicus arguments and each filed a

supplemental brief.

2 All further statutory references are to the Revenue and

Taxation Code.

4

after the transfer because the proportional ownership interests,

as measured by all the stock of the transferor corporation, had

changed.

The trial court agreed with the Assessor and upheld the

reassessment. We affirm.

FACTUAL AND PROCEDURAL BACKGROUND

Super A Foods, Inc. (the “Corporation”) held title to two

pieces of real property (the “Property”) in Los Angeles. All of the

Corporation’s voting stock was issued to the Trust. The

Corporation’s non-voting stock was issued to the Trust and

several other individuals, including a company employee.

On December 5, 2014, the Corporation transferred the

Property to the Trust whose beneficiaries did not include the

persons who had non-voting stock in the Corporation. The

Assessor determined the transfer constituted a change of

ownership from the Corporation to a separate entity, the Trust,

and reassessed the Property from approximately $5 million to

$10 million. The Trust appealed the Assessor’s change-of-

ownership determination to the Assessment Appeals Board

(Board).

The Board reversed the reassessment, concluding that no

change in ownership occurred when the Corporation transferred

the Property to the Trust. The Board reasoned that only voting

stock should be considered when analyzing whether the

proportional ownership interest exclusion applies under section

62(a)(2). As the Trust owned 100 percent of the voting stock of

the transferor Corporation and the transferee was the Trust

itself, the Board found that the transfer was excluded from

reassessment under section 62(a)(2).

The Assessor filed a petition for writ of administrative

mandate in the trial court and sought to vacate the Board’s

5

decision. The Assessor argued that principles of statutory

construction require that section 62(a)(2) be interpreted to

measure ownership interest using both an entity’s voting and

non-voting stock. The trial court agreed and granted the petition.

The Trust timely appealed.

DISCUSSION

1. Standard of Review and Statutory Interpretation

Principles

On appeal of a trial court’s ruling on a petition for writ of

administrative mandate, we review de novo issues of statutory

interpretation under Code of Civil Procedure section 1094.5.

(Anserv Ins. Servs. v. Kelso (2000) 83 Cal.App.4th 197, 204.) The

general principles that guide interpretation of a statutory scheme

are well-settled. (Rudd v. California Casualty Gen. Ins. Co.

(1990) 219 Cal.App.3d 948, 952.) “Our function is to ascertain

the intent of the Legislature so as to effectuate the purpose of the

law. [Citation.] To ascertain such intent, courts turn first to the

words of the statute itself [citation], and seek to give the words

employed by the Legislature their usual and ordinary meaning.

[Citation.] When interpreting statutory language, we may

neither insert language which has been omitted nor ignore

language which has been inserted. [Citation.] The language

must be construed in the context of the statutory framework as a

whole, keeping in mind the policies and purposes of the statute

[citation], and where possible the language should be read so as

to conform to the spirit of the enactment. [Citation.]” (Ibid.)

2. Property Tax Reassessments

“In 1978 the voters adopted Proposition 13, which provides

that until a change in ownership occurs real property may be

taxed at no more than 1 percent of its 1975–1976 assessed value

adjusted for inflation. When ownership changes, the property

6

may be reassessed at its current market value.” (Pacific

Southwest Realty Co. v. County of Los Angeles (1991) 1 Cal.4th

155, 158–159 (Pacific Southwest Realty); 926 North Ardmore

Ave., LLC v. County of Los Angeles (2017) 3 Cal.5th 319, 326 [a

“change in ownership triggers reappraisal and reassessment for

property tax purposes”].) “Because Proposition 13 did not

explicate the meaning of ‘change in ownership’ [citations], it fell

to the Legislature to define the phrase . . . .” (Pacific Southwest

Realty, supra, pp. 160–161.) The Legislature did so by codifying

the change-in-ownership test in Revenue and Taxation Code

section 60. (Id. at p. 161.)

Section 60 defines a “change in ownership” as “a transfer of

a present interest in real property, including the beneficial use

thereof, the value of which is substantially equal to the value of

the fee interest.” Section 62 lists various tax-exempt transfers as

excluded from the definition of a change in ownership.

At issue here is section 62(a)(2) which provides that a

change of ownership does not include “any transfer . . . between

legal entities . . . that results solely in a change in the method of

holding title to the real property and in which proportional

ownership interests of the transferors and transferees, whether

represented by stock, partnership interest, or otherwise, in each

and every piece of real property transferred remain the same

after the transfer.”

3. Facially, the Plain Meaning of Section 62(a)(2)

Proportionality is Measured by All Stock

In challenging the trial court’s ruling, the Trust argues the

plain meaning of “stock” should be disregarded. It contends

“stock” in section 62(a)(2) is ambiguous and, by applying various

forms of statutory construction, “stock” should be interpreted to

mean only voting stock. Construed in this fashion, the

7

proportional ownership interests of the transferor (the

Corporation) and the transferee (the Trust) remained the same

after the transfer of the Property. The Trust owned all the voting

stock in the Corporation and, as transferee, the Trust owned the

property outright. Accordingly, the Trust argues that no change

of ownership occurred when the Property was transferred, and

the Property should not have been reassessed.

a. The Common Meaning of Stock

The Assessor argues that the plain meaning of “stock” as

used in section 62(a)(2) includes stock of every class, not just

voting stock. The parties do not dispute that the commonly

accepted and ordinary meaning of the term “stock” includes both

voting and non-voting stock.3

b. The Trust’s Ambiguity Argument

In arguing that “stock” in section 62(a)(2) is ambiguous, the

Trust relies on the principle that clear statutory language may be

“rendered ambiguous when the language is read in light of the

statute as a whole or in light of the overall legislative scheme.”

(People v. Valencia (2017) 3 Cal.5th 347, 360.) According to the

Trust, section 62(a)(2)’s use of the term “stock” is ambiguous

because other provisions in the “statutory scheme” use “stock”

when referring to “voting stock.”

3 See entry for “Stock” in Black’s Law Dictionary (11th ed.

2019) [defining the term and listing various kinds of stock,

including voting and non-voting stock; other examples include

common stock, preferred stock, and treasury stock].

8

The Trust posits several arguments to support its claim

that, as a matter of statutory interpretation, “stock” in section

62(a)(2) really means “voting stock.” We consider each.4

1. “Voting Stock” in the Statutory Scheme and

Elsewhere in the Revenue & Taxation Code

Principal among the Trust’s various arguments is that

section 64 and related sections of the Revenue & Taxation Code

essentially use “stock” and “voting stock” interchangeably. So,

the argument continues, “stock” in section 62(a)(2) means “voting

stock.” A careful reading of the code sections on which the Trust

relies does not show the terms are interchangeable.

The Trust’s principal focus for this argument is on two

subdivisions of section 64.5 Subdivision (b) of section 64 (section

4 The trial court concluded that “stock” in section 62(a)(2)

was not ambiguous but proceeded to consider the Trust’s other

proposed statutory interpretation, as do we.

5 Section 64, subdivisions (a) through (c) provide in part,

“(a) Except as provided in subdivision (i) of Section 61 and

subdivisions (c) and (d) of this section, the purchase or transfer of

ownership interests in legal entities, such as corporate stock or

partnership or limited liability company interests, shall not be

deemed to constitute a transfer of the real property of the legal

entity. This subdivision is applicable to the purchase or transfer

of ownership interests in a partnership without regard to

whether it is a continuing or a dissolved partnership.

“(b) Any corporate reorganization, where all of the corporations

involved are members of an affiliated group, and that qualifies as

a reorganization under section 368 of the United States Internal

Revenue Code and that is accepted as a nontaxable event by

similar California statutes, or any transfer of real property

among members of an affiliated group, or any reorganization of

9

64(b)) provides that “any transfer of real property among

members of an affiliated group . . . shall not be a change of

ownership.” The subdivision then defines “affiliated group” as

“one or more chains of corporation connected through stock

farm credit institutions pursuant to the federal Farm Credit Act

of 1971 (Public Law 92-181), as amended, shall not be a change of

ownership. The taxpayer shall furnish proof, under penalty of

perjury, to the assessor that the transfer meets the requirements

of this subdivision.

“For purposes of this subdivision, ‘affiliated group’ means

one or more chains of corporations connected through stock

ownership with a common parent corporation if both of the

following conditions are met:

“(1) One hundred percent of the voting stock, exclusive of

any share owned by directors, of each of the corporations, except

the parent corporation, is owned by one or more of the other

corporations.

“(2) The common parent corporation owns, directly, 100

percent of the voting stock, exclusive of any shares owned by

directors, of at least one of the other corporations.

“(c)(1) When a corporation, partnership, limited liability

company, other legal entity, or any other person obtains control

through direct or indirect ownership or control of more than 50

percent of the voting stock of any corporation, or obtains a

majority ownership interest in any partnership, limited liability

company, or other legal entity through the purchase or transfer of

corporate stock, partnership, or limited liability company

interest, or ownership interests in other legal entities, including

any purchase or transfer of 50 percent or less of the ownership

interest through which control or a majority ownership interest is

obtained, the purchase or transfer of that stock or other interest

shall be a change of ownership of the real property owned by the

corporation, partnership, limited liability company, or other legal

entity in which the controlling interest is obtained.”

10

ownership with a common parent corporation if . . . (1) One

hundred percent of the voting stock . . . is owned by one or more

of the other corporations [and] (2) The common parent

corporation owns, directly, 100 percent of the voting stock . . . .”

(§ 64(b) (emphasis added).) The Trust argues that the “term

‘stock’ in the first sentence here means voting stock, as the two

numbered sentences make clear.”6 We do not read it that way.

Rather, giving these words their “usual and ordinary” meaning as

we must (see In re Alpine (1928) 203 Cal. 731, 736–737), this

sentence is explained as follows: The Legislature has used a

general term (stock) to explain the basic corporate relationship

with the parent (e.g. not a partnership), followed by a more

specific term (voting stock) to measure which type of stock

qualifies for the exclusion. (See Marshall v. Pasadena Unified

School Dist. (2004) 119 Cal.App.4th 1241, 1254.) In this context,

voting stock is one of many classes of stock and is the one class

that matters under section 64. It does not follow that “stock”

means “voting stock” in section 62(a)(2).

The Trust also cites to subdivision (c)(1) of section 64

(section 64(c)(1)), which provides that “When a corporation . . .

obtains control through direct or indirect ownership or control of

more than 50 percent of the voting stock of any corporation . . .

the purchase or transfer of that stock or other interest shall be a

change of ownership . . . .” (Emphasis added.) The Trust argues

that “voting stock” and “stock” are used interchangeably here.

We see it differently—the use of the word “that” shows that the

6 By “first sentence here,” we understand the Trust to mean

“one or more chains of corporation connected through stock

ownership with a common parent corporation.”

11

Legislature was referring to the prior use of “voting stock” in the

sentence, using “that” in a grammatically correct manner.

Nor do we find the different uses of “voting stock” in other

parts of the Revenue and Taxation Code to mean that “stock” in

section 62(a)(2) is “voting stock.” Each of the Code provisions

cited by the Trust uses the specific term “voting stock,” not the

more general term “stock.” This shows the Legislature knew how

to refer to “voting stock” when defining “ownership interests,”

and deliberately chose a different test for section 62(a)(2) than for

other types of transfers. (See § 64(c) [transfer of ownership

interest in a legal entity], § 64(b) [transfer of real property among

subsidiaries]; § 62.1 [transfer of mobile home park to nonprofit,

stock cooperative, limited equity stock cooperative or other entity

formed by tenants]; § 62.5 [transfer of floating home marina to

nonprofit, stock cooperative, limited equity stock cooperative or

other entity formed by tenants].

The Trust’s argument would carry more weight if the Code

used “stock” infrequently, but “stock” is used repeatedly in the

Code.7 That the Legislature regularly uses both “stock” and

voting stock” in various parts of the Code undermines the Trust’s

argument that in section 62(a)(2), “stock” was only a stray

misnomer of “voting stock.” To adopt the Trust’s argument would

suggest that these terms are interchangeable throughout the

Code, and would make “stock” or “voting stock” at times

superfluous. (See Wells v. One2One Learning Foundation (2006)

7 Numerous provisions in the Code use the term “stock”

(§§ 23361, 23804, 250105) while others use the term “voting

stock” (§§ 62.1, 62.5, 2188.10). A search of the Code reveals that

“stock” is used much more frequently than “voting stock.”

12

39 Cal.4th 1164, 1207 [“interpretations which render any part of

a statute superfluous are to be avoided”].)8

2. “Voting Stock” in Property Tax Rule 462.240

The Trust also cites Property Tax Rule 462.240, subdivision

(d) to support its “stock” means “voting stock” argument.9 As it

did with section 64, the Trust again points out the regulation

uses “stock” and “voting stock” in the same sentence. (Cal. Code

Regs., tit. 18, § 462.240.) Under this regulation, an employee

benefit plan’s acquisition “of the stock of the employer

corporation pursuant to which the employee benefit plan obtains

. . . more than 50 percent of the voting stock” (emphasis added) of

the corporation is not a change in ownership. This use of the two

terms neither creates ambiguity nor proves that the words are

equivalents. As in section 64, subdivision (b), the regulation

employs a general term (stock) to describe a transaction that

8 Quite the contrary, section 23361 subdivision (a), for

example, expressly distinguishes “stock” and “voting stock” in the

statute’s last sentence: “Except in paragraph (c), ‘stock’ does not

include nonvoting stock which is limited and preferred as to

dividends.” (Emphasis added.) Stock has one meaning in

paragraphs (a) and (b) and a different one in paragraph (c).

9 The regulations set forth in California Code of Regulations,

title 18 are referred to as “property tax rules.” (Phillips

Petroleum Co. v. County of Lake (1993) 15 Cal.App.4th 180, 189,

fn. 7; CAT Partnership v. County of Santa Cruz (1998)

63 Cal.App.4th 1071, 1077, fn. 4.) The rules of this subchapter

“govern assessors when assessing, county boards of equalizations

and assessment appeals boards when equalizing, and the State

Board of Equalization, including all divisions of the property tax

department.” (Cal. Code Regs., tit. 18, § 1.)

13

involves stock acquisition, and then employs a different and more

specific term (voting stock) to measure what type of stock

transaction results in a change of ownership. We reject the

Trust’s argument by applying one of the common statutory

construction principles – the use of two different terms in a

statute indicates a legislative intent to distinguish between the

terms. (See Campbell v. Zolin (1995) 33 Cal.App.4th 489, 497

[“ordinarily, where the Legislature uses a different word or

phrase in one part of a statute than it does in other sections or in

a similar statute concerning a related subject, it must be

presumed that the Legislature intended a different meaning.”].)10

c. The State Board of Equalization’s Ambiguity

Argument

Lastly, the Trust adopts the argument of amicus the State

Board of Equalization that the term “stock” is ambiguous because

there are many subcategories of stock. But the fact that there

are subcategories of a general term does not show ambiguity;

rather it confirms that the general term includes all the

subcategories. The Code expressly identifies numerous

subcategories of stock: voting stock (§ 64), non-voting stock

(§ 23361), capital stock (§ 212), treasury stock (§ 24942), common

stock (§ 23040.1), preferred stock (§ 23040.1), and qualified small

10 The parties and amici have directed our attention to

several extrinsic sources such as the Assessor’s Handbook,

Letters to the Assessor, and legal opinions of the State Board of

Equalization. We agree with the trial court that these materials

are not particularly helpful. None of the examples cited in these

materials addresses the situation in which both voting and non-

voting stock are at play in determining ownership under section

62(a)(2).

14

business stock (§ 18038.4). The statutory references to these

various classes of stock reaffirms our interpretation of “stock” in

section 62(a)(2) as meaning all classes of stock, not just voting

stock. 11

11 The dissent expresses concern that our holding will open

the “door to a patchwork, county-by-county system of differing

assessment practices that is the opposite of what the Legislature

intended.” (Dis. Opn., p. 3) To avoid that result, the dissent

suggests that this court should interpret Tax and Revenue Code,

section 62(a)(2) consistent with the construction given by State

Board of Equalization (“Board”). The Board is charged with

preparing and issuing “instructions to assessors designed to

promote uniformity throughout the state and its local taxing

jurisdictions in the assessment of property for the purposes of

taxation.” (Gov. Code, § 15606, subd. (e).) The Board filed an

amicus brief and stated that it interpreted “stock” in Tax and

Revenue Code section 62(a)(2) as meaning voting stock. The

California Assessors Association, a statewide association for

assessors representing each of California’s 58 counties, also filed

an amicus brief, taking the contrary position, namely that “stock”

means all stock. Ultimately, it is this court’s task to interpret the

statute. “Courts must, in short, independently judge the text of

the statute, taking into account and respecting the agency’s

interpretation of its meaning, of course, whether embodied in a

formal rule or less formal representation. Where the meaning

and legal effect of a statute is the issue, an agency’s

interpretation is one among several tools available to the court.

Depending on the context, it may be helpful, enlightening, even

convincing. It may sometimes be of little worth.” (Yamaha Corp.

of America v. State Bd. of Equalization (1998) 19 Cal.4th 1, 7–8.)

It remains to be seen whether our holding prompts the

adoption of practices that avoid the dissent’s concern about

patchwork interpretation of section 62(a)(2). If not, or for other

reasons, the Legislature may step in.

15

4. The Trust’s Reliance on Section 64 Is Substantively

Misplaced

Implicit in many of the Trust’s arguments is that sections

62 and 64 must be read together because they cover the same

subject. That assumption does not hold up. The two statutes

address two different kinds of transactions: the former deals

with the actual transfer of real property from one entity to

another; the later deals with a change of ownership of the legal

entity (a corporation) that owns real property. Because the two

sections deal with different methods of changing property

ownership, section 64’s rules relating to control of a corporation

do not fit in the proportionality exclusion under section 62(a)(2).

This point is illustrated in section 64, subdivision (c)(1).

When an entity obtains control of a corporation through its

“ownership or control of more than 50 percent of the voting stock

of [the] corporation,” (section 64(c)(1)), the new configuration of

the corporation becomes a transferee owner of the corporate real

property for reassessment purposes. The 50 percent demarcation

apparently represents a legislative policy that, because shares of

corporations are regularly traded, sales of less than 50 percent of

the voting stock are legally not significant to justify

reassessment.

The Trust’s argument that the Legislature meant “voting

stock” when it used “stock” in section 62 similar to section 64

ignores that section 62 does not address sales of corporate stock

at all, but transfers of real property from one entity to another.

Nothing in the record suggests that intrinsic in the nature of

corporations is that voting stock must be the sole measure of

transfers from a corporation to another form of ownership.

Section 62(a)(2) looks at the proportional interests in real

property of owners of the transferor and transferee entities, not a

16

change in stock ownership.12 The Legislature reasonably could

use stock or voting stock or other standards as its section 62(a)(2)

reassessment yardstick. It chose for corporations “stock,” even

though, as we have seen, voting stock is used in other situations

covered by the Revenue and Taxation Code.

In the present case, the proportional ownership interests

were not aligned before and after transfer. Before the transfer,

the corporation had at least five stockholders, namely several

individuals and the Trust, all five having economic interests in

the Property held by the corporation. After the transfer, the

Trust owned the Property, and the individuals no longer had any

ownership interest in the Property. The proportional ownership

interests of the transferor and transferee were different.

5. The “Primary Economic Value” test in Section 60 also

Supports that all Stock Is Considered in Applying

Section 62(a)(2)

Finally, the Assessor correctly observes that section

62(a)(2) must be read in light of section 60, which provides, “A

‘change in ownership’ means a transfer of a present interest in

real property, including the beneficial use thereof, the value of

which is substantially equal to the value of the fee interest.”

Under section 60, there is a change in ownership of real

property when there is “(1) a transfer of a present interest in real

property, (2) including the beneficial use thereof, (3) the value of

which is substantially equal to the value of the fee interest.”

(Pacific Southwest Realty, supra, 1 Cal.4th at p. 162.) As

explained by the Pacific Southwest Realty court, the “Legislature

intended to find a change in ownership when the primary

12 Section 64 does not use the “proportional ownership

interests” standard.

17

economic value of the land is transferred from one person or

entity to another.” (Id. at p. 167.)

The “beneficial use” inquiry in whether or not there has

been a change of ownership under section 60 asks who has an

economic interest in a parcel of real estate, not the nature of the

ownership interests in the entity that owns the real property.

Here, the Corporation’s Articles of Incorporation state, “[E]xcept

with respect to all voting rights being vested exclusively in the

holder of the Voting Common Shares, as herein provided, the

Voting Common Stock and the Nonvoting Common Stock shall be

equal in all other respects including but not limited to, dividend

and liquidation rights.” By express provision, at a minimum both

voting and non-voting stockholders had “dividend and

liquidation” rights, meaning both had economic interests in the

Corporation.13 After the transfer, non-voting stockholders had no

interest in the Trust and had lost their previous economic

interest in the real property. The economic value of the

properties had been transferred from the non-voting stockholders

to the voting stockholders, resulting in a change in ownership

under section 60 and one not excluded under section 62(a)(2).

13 The trial court also found that non-voting stockholders had

economic interests in the Corporation. “The non-voting

shareholders own between .09% and 1.7% of the [Corporation’s]

stock. The Assessor appraised the Property at $10,280,000. It is

not inconceivable that, upon liquidation of the [Corporation], a

1/7% [sic] shareholder may receive a significant portion of this

amount.” Using the trial court’s findings, the non-voting

stockholders would be entitled to between $92,520 and $174,760

if the Corporation had sold the property.

18

DISPOSITION

The judgment is affirmed. Each party is to bear its own

costs on appeal.

RUBIN, P. J.

I CONCUR:

MOOR, J.

Jeffrey Prang, as County Assessor, etc. v. Luis Amen, as Trustee,

etc. et al.

B298794

BAKER, J., Dissenting

Resolving an issue of statewide importance, the majority

opinion authorizes the Assessor in Los Angeles County to

reassess real property in a manner inconsistent with the

considered legal view of the State Board of Equalization (the

Board)—the entity responsible for promulgating property tax

assessment regulations and for instructing county assessors on

correct property tax assessment methods. (Gov. Code, § 15606,

subd. (c); see also Gov. Code, § 15606, subd. (e) [directing the

Board to “[p]repare and issue instructions to assessors designed

to promote uniformity throughout the state and its local taxing

jurisdictions in the assessment of property for the purposes of

taxation”].) As a matter of statutory interpretation and of

implementing agency deference (Steinhart v. County of Los

Angeles (2010) 47 Cal.4th 1298, 1322; Hoechst Celanese Corp. v.

Franchise Tax Bd. (2001) 25 Cal.4th 508, 524-525; SHC Half

Moon Bay, LLC v. County of San Mateo (2014) 226 Cal.App.4th

471, 485), the majority opinion reaches the wrong result.

In regulations interpreting related statutes (see, e.g., Rev.

& Tax. Code, § 64, subd. (d); Cal. Code Regs., tit. 18, § 462.180)

and in guidance issued to county assessors that discusses

Revenue and Taxation Code section 62, subdivision (a)(2) (Section

62(a)(2)), the Board has interpreted the term “stock” to mean

voting stock. That interpretation should be given great weight,

2

and I see no good reason to deviate from it. As the Board

persuasively explains in the amicus briefing this court invited, its

interpretation of “stock” harmonizes Section 62(a)(2) with

pertinent portions of the statutory scheme implementing

Proposition 13. As the Board elaborates: “If Section 62(a)(2)

means ‘all stock,’ the exclusion under Section 62(a)(2) would be

measured under one standard—all stock—but under a different

standard—voting stock—to measure when the exclusion ends

under [Revenue and Taxation Code] Section 64(d).” Reading

“stock” in Section 62(a)(2) to mean voting stock also avoids

significant administrative difficulties because, as the Board again

explains, “evaluat[ing] the proportional ownership interests of

voting stock is relatively straightforward and readily

ascertainable” while “[a]ssessing whether or not the ‘proportional

ownership interests of the transferors and transferees’ remained

the same [for all stock shares] would necessitate an evaluation of

all the different classes and types of stock and their attendant

rights, having to assign what may amount to random percentages

of ownership to particular classes of stock since . . . owners of

corporations have no specific right to any corporate real

property.”

The majority’s oversimplified interpretive approach (the

statute just says “stock,” so that means any sort of stock) fails to

harmonize the statutory scheme, and that is an analytical flaw.

Analytical vulnerabilities, however, are the least of the opinion’s

problems; the deleterious practical consequences of today’s

holding are the real concern. The Legislature has stated a

preference for uniformity in the administration of property tax

assessment practices throughout the state—with the Board

specifically charged with achieving that end. (Gov. Code,

§ 15606, subd. (e).) The majority nonetheless permits the Los

3

Angeles County Assessor to disregard the Board’s instructions

and expertise, thereby opening the door to a patchwork, county-

by-county system of differing reassessment methods that is the

opposite of what the Legislature intended. Not only that,

decisions about how to structure an untold number of property

transactions and legal entity relationships in Los Angeles County

have almost certainly been informed by the Board’s longstanding

guidance regarding Section 62(a)(2) and related statutes. The

majority upends these reliance interests with unpredictable and,

at least in some cases, unfair consequences.

Let us therefore hope today’s decision is not the last word

on the meaning of Section 62(a)(2). For now, I respectfully

dissent.

BAKER, J.